Denmark helps China reform its electricity market

State of Green
By Danish Energy Agency, January 10, 2018

In collaboration with Electric Power Planning and Engineering Institute, the Danish Energy Agency will help China establish a market-based electricity market and utilise the untapped energy from wind and solar power.

In collaboration with Electric Power Planning and Engineering Institute, the Danish Energy Agency will help China establish a market-based electricity market and utilise the country’s untapped energy from wind and solar power. The first step is a two-days’ workshop in Beijing today and tomorrow, where experts from the Danish Energy Agency, Energinet and the EU Commission will pass along Danish and European experience with managing a market-based electricity market.

In 2016, the Chinese system administrators completed compulsory downward adjustments to wind and solar power production equivalent to 57 TWh – in other words; a C02-neutral electricity production corresponding to the loss of one and a half the total electricity consumption in Denmark as such green energy production is not currently utilised in China’s plan system, where coal-based power has precedence. This great loss still constitutes a barrier that could delay the ambitious plans for extensive expansion of wind and solar power in China.

Pilot projects in 8 Chinese provinces
In the summer of 2016, the National Energy Administration (NEA) in China initiated pilot projects in eight provinces due to run out in 2018. The projects are all aimed at establishing a market-based electricity market. The purpose of the pilot projects is to achieve operational and hands-on experiences by initiating and managing market-based electricity markets within different provinces. Experiences from this will support the Chinese objective to archieve a market-based electricity market in China by 2020.

NEA has appointed one of the Danish Energy Agency’s regular Chinese buisness partners, Electric Power Planning and Engineering Institute, to conduct the work of assisting a number of key Chinese stakeholders.

Workshop in Beijing
Due to Denmark’s long history of energy collaboration with China and Danish experiences with the liberatisation of the market as well as integration of renewable energy, Electric Power Planning and Engineering Institute has invited Denmark to assist in the establishment of a modern market-based electricity market that will make use of the unutilized renewable electricity production.

As a part of these efforts, experts from Energinet and the EU Commission’s department for energy has been invited to undertake a two-days’ workshop in Beijing today and tomorrow. The purpose is to bring Danish and European experiences in as direct input to the task facing the Chinese energy administration. The workshop will function as tangible expert assistance in topics that participants bring up over the course of the two days. More specifically, the contribution will consist of experiences in establishing an integrated electricity market in Europe, the daily operational maintenance, the process of electricity trade and institutional precautionary measures for possible market misuse.

The attendees are a number of Chinese stakeholders responsible for the pilot markets and the overall reform of the Chinese electricity market.

Progress in China
Throughout several decades, the Danish Energy Agency has had close cooperation with China within the field of energy –  among other things, the organisation has contributed to analysis and policy work that China National Renewable Energy Center (CNREC) has delivered to Chinese energy authorities. In November in Bonn during COP23, CNREC launched an extensive Outlook: China Renewable Energy Outlook 2017, which among other things outlines the future green transition of the Chinese energy system towards 2050, which also accounts for the benefits of a competitive and integrated electricity market in China that resembles that of the Nordic countries.

China is currently responsible for approximately 30 percent of global CO emissions. The transition to a market-based electricity market is a crucial step in the efforts for a green transition. Because of the Danish Energy Agency’s partnership programmes, Denmark contributes by sharing Danish experiences with green transition in twelve different countries at present – countries that collectively account for 60 percent of the global emission of greenhouse gasses and potentially represent up to 4 billion energy consumers.

For more information
Contact Consultant Laust Riemann from the Danish Energy Agency
Tel: +45 25 72 82 89

– Read more about the Danish Energy Agency here

Source: The Danish Energy Agency

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